US judge approves pizza chain Papa John’s ‘no poach’ antitrust settlement

By Mike Scarcella

Aug 7 (Reuters) - A federal judge has preliminarily approved a $5 million class action settlement resolving claims that pizza chain Papa John's PZZA.O unlawfully restricted employee mobility among franchises, suppressing workers’ wages.

U.S. District Judge Benjamin Beaton in Louisville, Kentucky in a ruling on Thursday called the proposed accord fair and reasonable.

Employees sued Papa John's in 2018 over agreements between franchise owners not to solicit or "poach" each others' employees, alleging the agreements violated antitrust law. There are about 400,000 members in the class, comprising employees from 2014 to 2021.

Class members could receive on average $165 as part of the settlement, if 20% of the class make claims, court papers show.

Papa John’s and lawyers for the plaintiffs did not immediately respond to requests for comment.

Papa John’s has denied any wrongdoing. The plaintiffs said settling will avoid the uncertainty of future litigation.

The settlement also requires Papa John’s to conduct antitrust compliance training and circulate a notice among its franchisees that they cannot enforce existing no-poach agreements. The company agreed not to include no-poach provisions in franchise agreements for the next five years.

The plaintiffs’ lawyers said they would seek up to 25% of the settlement fund, or $1.25 million, for attorney fees.

The judge said he would weigh potential objections to the settlement and hold a final approval hearing on Jan. 7

The case is In re: Papa John's Employee and Franchisee Employee Antitrust Litigation, U.S. District Court, Western District of Kentucky, No. 3:18-cv-00825-BJB-RSE.

For plaintiffs: Lin Chan of Lieff Cabraser Heimann & Bernstein; Michelle Conston of Scott+Scott Attorneys; Richard McCune of McCune Wright Arevalo; and Christian Levis of Lowey Dannenberg

For defendants: Gerald Maatman Jr of Duane Morris

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